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Commentary: Budget crisis awaits next governor

Matt Pommer

The governor elected next year will face more than a $2 billion gap in the state’s 2011-13 budget, according to the nonpartisan Legislative Fiscal Bureau.

That will occur despite the $3 billion in tax and fee increases enacted this year. The largest tax increases came in the state income tax, boosting the rate on the wealthiest citizens from 6 percent to 7.75 percent, and cutting the 60 percent capital gains exemption in half to 30 percent.

Wisconsin entered the year with one of the worst finance pictures among the states. The tax increases, federal stimulus funds, refinancing debt and shuffling of funds helped Wisconsin to get through the current biennium.

Incumbent Gov. Jim Doyle said he won’t seek re-election, seeming to assure primaries in both his Democratic and the opposition Republican parties.

Before 2010 is very old, you can expect several of the gubernatorial candidates to talk about zero-based budgeting as a way to avoid any future state-collected tax increase. Zero-based budgeting requires each program and its cost to be justified in each new spending plan, instead of basing decisions on the previous budget’s expenses.

Forty years ago in another open election for governor, Republican Lt. Gov. Jack Olson talked the zero-based budgeting idea. Incumbent Republican Gov. Warren Knowles said it wouldn’t work, and Democrat Pat Lucey was elected by more than 125,000 votes.

This year the incumbents relied heavily on the income tax to balance the budget, perhaps appropriately. In 1908, citizens approved the constitutional amendment for the tax by more than a 2-to-1 ratio.

The amendment was touted 100 years ago as a solution to high property taxes. The income tax continues to provide significant aid to local governments and school districts, easing the potential property-tax burden.

Indeed much of the state’s general fund spending is to pay for local government. Those who favor zero-based budgeting would like you to forget that role. Zero-based budgeting suggests state “spending” can be cut to avoid state-collected tax increases.

The media and citizens should seek and get straight answers to the tax and spending questions lurking in 2010.

There is another worry on the political horizon. Will extremists on both the right and left heckle the gubernatorial candidates between the September primary and November general election? Some now seem to see a constitutional right to shout down officials.

Alas, this is the stuff TV stations love. It takes just a few seconds of airtime, compared with the minutes to explain the detailed plans of Republicans and Democratic candidates.

Matt Pommer worked as a reporter in Madison for 35 years. He comments on state political and policy issues.

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